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Paytm share price: Paytm Shares Surge 20%, Macquarie double upgrades stock

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Batori24 Bureau
Batori24 Bureau
Batori24 is a Vernacular based Assamese news portal based in Guwahati Assam. We are a dedicated news channel covering news and stories across the globe with special reference to Assam, north-east along with National and International news.

Paytm achieved operating profitability ahead of its September 2023 guidance, reporting Rs 31cr in EBITDA before ESOP in Q3FY23 and its first ever quarterly positive cash EBIDTA. Revenue increased by 42% to Rs 2,062 crore, owing to slower-than-expected growth in the payments business, which was offset by ticketing revenues. Net losses fell from Rs 771cr to Rs 392cr. Goldman Sachs has retired a Buy rating and raised the target price from Rs 1120 to Rs 1150. Revenue is expected to grow at a 25% CAGR from FY23 to FY25, with margins reaching double digits by FY25. Paytm’s stock rose 5% on an intraday basis.

Paytm, which is owned by One97 Communications, reported earnings before interest, taxes, depreciation, and amortisation (Ebitda) of 31 crore in the third quarter of fiscal year 2023, on revenue of operations of 2,062 crore.

Macquarie, which called the Vijay Shekhar Sharma-led One97 Communications (Paytm) a cash guzzler and cut the stock’s target to as low as Rs 450 on the day of its listing, has upgraded the stock to ‘Outperform’ from ‘Underperform’. The stock is now valued at Rs 800 per share by the foreign brokerage.

Macquarie said that since Paytm shares were listed at Rs 2,150 in mid-November 2021, the stock has fallen 70% against a flat Nifty, and that its view on the stock at Rs 2,150 differed from its view when the stock was priced at around Rs 600.

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Profit and free cash flow were not even discussed by management at the time of listing, according to Macquarie. However, there has been a noticeable shift in management’s approach to delivering profit, according to the report. The brokerage has increased its revenue estimates for FY23-26E by 33-51% and its target by 80%.

“Since our last target price cut, Paytm has outperformed by a wide margin in the distribution of financial services revenue and has also managed to control overall expenses and charges,” the company said.

 

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